Investors, Adrenaline and the Stock Markets!

The insecurity is high, the "safe" assets are few, but there will always be opportunities. “The man in the street” and the wealthy investors have something in common in time of writing – it is not easy to make investment decisions these days. The adrenaline is pumping – there is a lot of volatility going down in the markets. A disappointing quarterly result from a company can be enough to “topple” a stock exchange on just a single day. Even a single macro number can make exchanges fall drastically, especially if investors are interpreting the statistics as confirmation of high prices. The fear that the US central bank will have to increase the interest rate even more is still high.

In 2022, interest rates and inflation in the US are still driving development, also here in Europe. In fact, more than 60% of the world's stock exchanges are "over there". It's no secret that wall street “controls” the global investment climate. Nevertheless, the S&P 500 in New York and the DAX 30 in Frankfurt are still consolidating. Please note that the last 30 days looked promising for the indices in questions, but that was until last week when the former and the latter indices plunged 6% and 3% - wiping out the entire gain for the last month. Again, a confirmation that there is a lot of adrenaline out there and much is dependent on the central banks. Visuals correction for the last 5 days can be seen in the charts below. S&P 500 to the left and DAX30 to the right – representing the world’s biggest movements in the stock markets.

Source: Infront

Here in Norway, we are still having a good time, but that is because our exchange: Euronext Oslo is mainly driven by petroleum companies. Nevertheless, the plunge can become even bigger for us if the correct parameters are triggered. As we have seen with gas prices lately. They are still high, but from an all-time high perspective they are significantly down. Nevertheless, the oil price is still the most important source of income for Norway, and with country after country heading into or are already into recession, the long-term demand for oil is obviously being challenged. On the other hand, production cuts in OPEC can take away part of the oil supply. Acknowledgement between the dubious regimes in Russia and Saudi Arabia helps keep oil prices up.

Going forward, the results season will keep going. So far, we have seen that companies that deliver “worse than expected” are punished much more severely than ever before. Such profit risk is typically nervous markets that are facing tough macroeconomic behavior.

Adrenaline-seeking savers and investors will not go forward empty-handed either. Because interest rates will continue to rise and the fight against inflation is not at all over. Interest rates may have to be raised even more than the markets have already priced in.

However, for investors with a long-term horizon, it should also be possible to see through the noise. Even good long-term stocks can get a lot of "investor punishment" in such times. The potential for a price increase in individual stocks will emerge more clearly when all the quarterly reports have been released.

Cheers
-@Olebulls